Back to Cases PageThe following is the Final Consent Order by Stipulation which was filed on
9 May in Federal District Court for the Eastern District of Pennsylvania
in Philadelphia in Compuserve v. Cyber Promotions. In a separate
Memorandum of Settlement (not shown here), the parties jointly request
that the action be transferred to the US District Court for the Southern
District of Ohio for entering this Final Consent Order by Stipulation. It
is in that court where the final disposition should occur.
------------------------------------------------------------------------
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
COMPUSERVE INCORPORATED, )
)
Plaintiff, )
) Case No. C2-96-1070
v. )
) Judge Graham
CYBER PROMOTIONS, INC. and )
SANFORD WALLACE, )
)
Defendants. )
)
FINAL CONSENT ORDER BY STIPULATION
The parties having resolved their differences by agreement, and
this Court being otherwise fully advised of the premises of that
agreement,
IT IS HEREBY ORDERED:
1. This Court has jurisdiction over the parties, plaintiff
CompuServe Incorporated ("CompuServe") and defendants Cyber Promotions,
Inc. ("Cyber Promotions") and Sanford Wallace ("Wallace"). This Court has
subject matter jurisdiction over the controversy pleaded.
2. For purposes of settlement, the parties have agreed as
follows, and have consented that their agreements be incorporated into
this Final Consent Order by Stipulation:
a. The Defendants, their agents, and all other parties
acting in concert with them, are permanently enjoined from directly or
indirectly:
(i) causing, authorizing, participating in, or assisting others in
the sending of any commercial or promotional messages or solicitations
("Prohibited Messages") to a CompuServe e-mail address that have not been
specifically requested by the individual associated with that e-mail
address (such Prohibited Messages being referred to herein as "Unsolicited
Prohibited Messages"); and
(ii) causing, authorizing, participating in, or assisting others in
the use of any false or misleading reference to CompuServe, a CompuServe
e-mail address, or CompuServe equipment in the header of or in connection
with any electronic message.
For purposes of this Final Consent Order, the term "CompuServe e-mail
address" includes any e-mail address that is registered with, maintained
by, or maintained at or with facilities owned or operated by or on behalf
of, CompuServe or any of its subsidiaries or affiliates, provided that
Defendants have received written notice of the domain name or
identification number of such facility from CompuServe.
b. With respect to any service operated by either
Defendant that enables third parties to send or receive electronic
messages, the Defendant shall include in the applicable terms of service a
conspicuous provision that expressly prohibit s the user of that service
from using it in connection with Unsolicited Prohibited Messages sent to a
CompuServe e-mail address. The Defendant shall require each and every
user of such service to expressly and specifically affirm that the user
will not use the service in connection with the sending of Unsolicited
Prohibited Messages to any CompuServe e-mail address. Upon receipt of
notice from CompuServe that a user of such a service is using it in
connection with Unsolicited Prohibited Messages sent to a CompuServe
e-mail address, the Defendant shall, as soon as is practicable and in no
event later than two (2) business days after receiving the notice,
complete the steps necessary to ensure that the user does not continue to
do so, including, if necessary, permanently terminating that user's right
and ability to use the Defendant's service, and Defendant shall provide
CompuServe with all relevant information indentifying such user, including
home and business name, address, phone, fax, and e-mail information.
Defendants shall not sell or otherwise provide to any user of such a
service a list or other data disclosing CompuServe e-mail addresses.
c. Until such time as specified in paragraph 2(d) below,
CompuServe shall permit Cyber Promotions to send to a CompuServe e-mail
address, and CompuServe shall not block, messages for which Cyber
Promotions has first received a verified subscription request from that
e-mail address as prescribed by this paragraph 2(c).
(i) To verify a subscription request from a CompuServe e-mail
address, Cyber Promotions must send a responding confirmation request to
the e-mail address specified in that subscription request that asks the
recipient to confirm the subscription request by sending a reply e-mail
message confirming the request. The subscription request will be deemed
verified only if, within seven days after sending the confirmation
request, Cyber Promotions receives a direct reply to the confirmation
request from th e CompuServe e-mail address to which it was sent that
confirms the subscription request.
(ii) Every message sent to a CompuServe e-mail address by Cyber
Promotions pursuant to this paragraph 2(c) shall be sent from only one of
the following e-mail addresses, or such other address as the parties may
agree to in writing:
cyberout@cyberpromo.com cyberout@pleaseread.com
cyberout@answerme.com cyberout@tosguard.com
cyberout@savetrees.com
(iii) Cyber Promotions shall configure the computers and software
used to send any message to CompuServe e-mail addresses pursuant to this
paragraph 2(d) so that the return address for the message specified in the
header of the message contains t he same domain name of the e-mail address
from which Cyber Promotions sends the message. Cyber Promotions shall
also configure its computers and software so that each recipient is able
to cancel the subscription request and remove his or her CompuServe e
-mail address from Cyber Promotions' mailing list by use of the e-mail
"reply" command.
(iv) E-mail messages sent by Cyber Promotions to CompuServe e-mail
addresses pursuant to this paragraph 2(d) shall comply with CompuServe's
generally applicable Terms of Service in effect at the time the messages
are sent.
d. At such time, if any, that CompuServe implements a separate
program for delivering commercial or promotional electronic messages to
its subscribers, CompuServe shall provide Cyber Promotions with written
notice, which notice shall describe the program and invite Cyber to
participate in that program on terms similar to those offered by
CompuServe to other similarly situated participants in the program.
Receipt of the notice and the information contained in it shall not be
disclosed by Cyber Promotions to any third party without prior written
consent from CompuServe. Beginning the forty-sixth day after receiving
the notice, Cyber Promotions shall not send any commercial messages to any
CompuServe e-mail address other than through the program designated by
CompuServe for such messages.
e. Cyber Promotions shall be permitted to advertise on
CompuServe's service subject to CompuServe's standard policies and terms
and at CompuServe's standard rates.
f. Cyber Promotions and Sanford Wallace shall pay CompuServe
its reasonable attorneys' fees in bringing this action, in the following
amount and manner:
i) $10,000.00, due on or before May 2, 1997;
ii) $20,000.00, due on or before August 4, 1997;
iii) $20,000.00, due on or before November 3, 1997;
iv) $15,000.00, due on or before February 2, 1998.
Upon CompuServe's receipt of full payment of the amounts specified in
items (i)-(iv) of this paragraph 2(f), the parties shall exchange mutual
general releases with no admission of liability. Defendants shall be
jointly and severally liable for the payment obligations specified in
this paragraph 2(f). Each Defendant represents that the Defendant is
financially solvent and that the Defendant will engage in no act or
omission, the purpose or effect of which is to circumvent the payment
obligations or any other obligation specified in this Final Consent Order
or to jeopardize the Defendant's ability to satisfy those obligations in
full and in a timely manner. If any of the payments specified in this
paragraph 2(f) are not received by CompuServe in full by the specified due
date, or if either Defendant breaches any other obligation specified in
this Final Consent Order, then the balance of the payments specified in
this paragraph 2(f) shall become immediately due and payable and
CompuServe shall have the right to immediately terminate any or all of
its obligations under paragraphs 2(c), 2(d), and 2(e). Within twelve (12)
hours after receiving from CompuServe that the authorizations granted to
Cyber Promotions under paragraphs 2(c) and 2(d) have been terminated,
Cyber Promotions shall stop the sending of any Prohibited Messages to all
CompuServe e-mail addresses.
g. Upon CompuServe's receipt of each one of the four payments
specified in paragraph 2(f) above, Cyber Promotions shall be permitted to
place without additional charge one advertisement on CompuServe's service,
pursuant to CompuServe's standard terms for a "Run of Service"
advertisement guaranteed 250,000 impressions. The content of each
advertisement shall be subject to reasonable prior review and approval by
CompuServe.
h. Each Defendant shall execute as part of this Agreement an
"Affidavit of Confession of Judgment" in the forms attached hereto as
attachments A and B. CompuServe shall retain the original Affidavit
executed by each Defendant. If CompuServe does not receive any of the
payments specified in items (i)-(iv) of paragraph 2(f) above on or before
the date specified for that payment, CompuServe shall have the right to
file each Affidavit with the Court and to collect the judgment confessed
therein. Upon CompuServe's receipt of the final payment specified in item
(iv) of paragraph 2(f) above, it shall return the original executed
Affidavits to the Defendants.
i. If, at any time after entry of this Final Consent Order, any
e-mail message sent by either Defendant to a CompuServe e-mail address
violates this Final Consent Order, CompuServe, in addition to any other
relief to which it may be entitled under this Order and/or under law,
shall have the right to immediately terminate any or all of its
obligations under paragraphs 2(c), 2(d), and 2(e). Within twelve (12)
hours after receiving from CompuServe that the authorizations granted to
Cyber Promotions under paragraphs 2(c) and 2(d) have been terminated,
Cyber Promotions shall stop the sending of any Prohibited Messages to all
CompuServe e-mail addresses.
j. If, at any time after entry of this Final Consent Order, any
e-mail message sent by either Defendant to a CompuServe e-mail address
violates this Order, then, in addition to any other relief to which it may
be entitled under this Order and/ or under law, CompuServe shall be
entitled to recover from the Defendants, as liquidated damages, an amount
to be calculated as specified in this paragraph 2(j). The parties agree
that the actual damages to CompuServe from such messages are not readily
ascertainable without great difficulty. In any 5-day period in which a
Prohibited Message is received by a CompuServe e-mail address in violation
of this Order, CompuServe shall be entitled to recover from the Defendants
and Defendants shall pay to CompuServe:
i) $5,000, if the total number of CompuServe e-mail addresses
that received messages in violation of this Order during the 5-day period
is 100,000 or less;
ii) $10,000, if the total number of CompuServe e-mail addresses
that received messages in violation of this Order during the 5-day period
is more than 100,000 but less than 200,001;
iii) $20,000, if the total number of CompuServe e-mail addresses
that received messages in violation of this Order during the 5-day period
is more than 200,000 but less than 300,001;
iv) $25,000, if the total number of CompuServe e-mail addresses
that received messages in violation of this Order during the 5-day period
is more than 300,000 but less than 400,001;
v) $30,000, if the total number of CompuServe e-mail addresses
that received messages in violation of this Order during the 5-day period
is more than 400,000 but less than 500,001; and
vi) $35,000, if the total number of CompuServe e-mail addresses
that received messages in violation of this Order during the 5-day period
is more than 500,000.
k. This Final Consent Order by Stipulation shall be binding
upon and inure to the benefit of the parties and their respective
successors, heirs, executors, legal representatives, administrators, and
assigns. If CompuServe is acquired by another entity that has a
pre-existing agreement with Cyber Promotions that is inconsistent with
this Order, this Order shall apply only with respect to the services and
facilities that are operated by or on behalf of CompuServe after the
acquisition.
l. In any action to enforce the terms of this Final Consent
Order by Stipulation, the prevailing party shall be entitled to recover
from the other party its reasonable expenses in bringing such action,
including attorneys fees, in addition to any other relief to which it is
entitled under law.
m. This Court retains jurisdiction to interpret and enforce
this Final Consent Order by Stipulation.
IT IS SO ORDERED:
JAMES L. GRAHAM
United States District Judge
Dated:
Consented to:
CompuServe Incorporated Cyber Promotions, Inc.
By: /Signed/ By: /Signed/
Stephen M. Heaton Sanford Wallace PRESIDENT
Secretary
/Signed/
Sanford Wallace
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